IPD has released first quarter 2009 results for its UK Pooled Property Fund Indices, sponsored by The Association of Real Estate Funds (AREF) and HSBC Global Asset Management (UK) Limited.
Total returns for all pooled funds in the first quarter were -11.1%, less severe than the previous quarter's -18.7% return, although this level is a much steeper quarterly loss than the same period last year, which returned -4.9%. Year-to-date total returns to the end of Q1 2009 are -36.4%.
The All Pooled Funds Index returns for the first quarter fell short of those returned by direct property, which delivered a compounded total return of -7.1%, as measured by the IPD UK Monthly Property Index. This can be attributed, in part, to the impact of fund level costs and gearing on overall performance.
Over the first quarter, listed property companies and trusts continued to suffer even more dramatically from recessionary pressures than unlisted funds did, returning -27.9% over Q1 2009, as measured in the FTSE Real Estate Index. All Pooled Funds, however, underperformed the UK equity market, as reflected by the FTSE All Share Index, which recorded -9.1%, and the bond market which gained 2.2%, according to the FTSE 5-15 Years Gilt Index.
Within the 62-strong fund universe which has an aggregated net asset value of £20.6 bln. (approx. €21.28 bln.) the 27 balanced funds delivered a total return of -7.8%, while the 35 specialist funds, which typically hold higher levels of gearing, returned 15.1% over the first quarter.
Over the long-term, total returns for UK Pooled Property Funds returned at 5.2% p.a. over 10 years, outperforming equities, which returned -0.7% p.a., while underperforming the bond market, which returned 5.9% p.a. Over the medium-term, all pooled funds performance is now negative over the five year period to the end of Q1, at -0.8% p.a.